Political Action Center
Expand the American Preference Policy for Overseas Military Construction
In 1984, Congress enacted the “American Preference Policy” to increase opportunities for U.S. contractors bidding on projects in the American territories of the Pacific and on Kwajalein Island. This law allowed a 20 percent bid evaluation preference for U.S. contractors on projects that exceeded $1 million. Fourteen years later, the American Preference Policy was expanded to the countries bordering the Persian Gulf and Arabian Sea in response to the declining presence of U.S. contractors in this region.
The level of competition by U.S. construction contractors in the Middle East has been on a steady decline, resulting in an increased presence of non-U.S. international contractors. This hurts the U.S. economy and construction industry; reduces tax revenues for the federal government, and creates quality control issues.
The Following Factors Compel Re-Examination of the Bid Preference:
- The U.S. construction market is facing Depression Era unemployment.
- There is historical precedence for a preference given to U.S. contractors on International military construction projects.
- U.S contractors are held to higher accounting standards than most foreign international contractors.
- U.S. contractors are subject to higher ethical and safety standards under penalty of law.
- U.S. contractors achieve subcontracting and capacity building goals.
- Surety bonds are often waived for non-U.S. contractors.
A limited modification to the current preference policy would broaden the preference from countries bordering the Persian Gulf and Arabian Sea to include all countries that fall within the U.S. Central Command (CENTCOM) Area of Responsibility. This will incentivize increased competition for contracts by qualified U.S. firms in the following countries: Afghanistan, Bahrain, Egypt, Iran, Iraq, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Lebanon, Oman, Pakistan, Qatar, Saudi Arabia, Syria, Tajikistan, Turkmenistan, U.A.E., Uzbekistan and Yemen.
Tell Congress to expand the existing preference for U.S. contractors.
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